Ontario Secondary School Teachers’ Federation was in a conflict of interest with regard to accepting a large payment from the province. Did the OSSTF mishandle the issue?

The leaders of the Ontario Secondary School Teachers’ Federation mishandled the conflict of interest they were in with regard to the large and unusual payment they agreed to from the province as part of a recent settlement. It is important to specify here that they mishandled it, because being in a conflict of interest is not in itself unethical, at least until you handle it badly.

As reported recently, the Ontario Secondary School Teachers’ Federation (OSSTF) accepted a $1,000,000 payment from the province – a payment directly to the union – as part of an agreement to settle a high-profile labour dispute.

And the explanation offered for the payment doesn’t hold water. The province and the union claim that they payment was made in acknowledgement of the fact that the province’s new collective bargaining process made negotiations longer and more complicated for the union, and that the union as a result had borne additional costs. But of course, the length and complexity of the process are variables in any labour negotiation.

Even the round number ($1 million, precisely – really?) seems suspicious. If this payment were intended simply to cover costs, then you’d think the number would be something a bit more precise. The natural conclusion is that the payment was not intended to cover costs, per se, but to grease the wheels of agreement.

Now naturally, the fact that the money seems to be a quid pro quo is not in itself ethically problematic. Giving something and getting something is the essence of bargaining. But when a benefit accrues not to the members of the bargaining unit, but to the organization that bargains on behalf of that bargaining unit, our ears should perk up. In particular, it looks a lot like a conflict of interest.

A conflict of interest occurs any time someone is entrusted with either making decisions on behalf of, or offering advice to, someone else, while at the same time having some other interest that could reasonably be suspected to influence their judgment. The classic example is the judge faced with adjudicating a case involving a close relative. A judge in such a situation needs to disclose the conflict, and recuse herself from the case, so that any potential bias does not taint the proceedings. The point isn’t about the individual judge’s integrity; the point is that it’s reasonable to believe that anyone in such a situation, no matter how morally upright, is liable to find their judgment affected.

Being in a conflict of interest is not, in itself, unethical. A lawyer with two clients who want to sue each other is in a conflict of interest, as is a physician considering prescribing a drug manufactured by a drug company in which she owns shares. Being in such a situation itself is not in itself wrongful; the ethical question lies in how the professional in such a case handles the situation. Likewise, the OSSTF’s executive would not have been in the wrong simply by having been offered the money (and we don’t know whether it was the province or the OSSTF that suggested the payment), and they wouldn’t be in the wrong simply by spotting the opportunity to ask for it. Those things would merely place the OSSTF in a conflict of interest. But going ahead and asking for – or even simply accepting – would mean making a decision the impartiality of which could and should be questioned.

In the present situation, a conflict of interest arises because the interests of the members of the OSSTF are not perfectly aligned with the interests of the Federation as an organization. And it was the Federation as an organization that was apparently the recipient of the $1 million, not the Federation’s members. By accepting the payment, the Federation’s executive improved their operating budget, making their own lives easier and improving their image in the eyes of their dues-paying members. That gives then an interest in the decision, beyond simply doing what is best for members.

Modern organizations – including corporations, government agencies, and labour unions – necessarily run on huge amounts of trust. Conflict of interest, when mishandled, corrodes trust. Not just the OSSTF but every organization needs to work harder to recognize conflict of interest when it arises, and to deal with it appropriately.

Chris MacDonald, Ph.D., is Director of the Ted Rogers Leadership Centre and Founding Director of the Jim Pattison Ethical Leadership Education and Research program, at Ryerson University's Ted Rogers School of Management. He is also a Nonresident Senior Scholar at Duke University's Kenan Institute for Ethics. His research interests range across the ethics of commerce, health policy, the professional ethics, and the social implications of technology. MacDonald is the author of more than 30 peer-reviewed publications, a best-selling textbook on critical thinking, and the highly-regarded Business Ethics Blog (businessethicsblog.com). He is also a founding co-editor and co-publisher of a cutting-edge online publication, The Business Ethics Journal Review. The views expressed here are his alone, and not the views of the Leadership Centre, the School of Management, or Ryerson University.

Chris MacDonald, Ph.D., is Director of the Ted Rogers Leadership Centre and Founding Director of the Jim Pattison Ethical Leadership Education and Research program, at Ryerson University's Ted Rogers School of Management. He is also a Nonresident Senior Scholar at Duke University's Kenan Institute for Ethics. His research interests range across the ethics of commerce, health policy, the professional ethics, and the social implications of technology. MacDonald is the author of more than 30 peer-reviewed publications, a best-selling textbook on critical thinking, and the highly-regarded Business Ethics Blog (businessethicsblog.com). He is also a founding co-editor and co-publisher of a cutting-edge online publication, The Business Ethics Journal Review. The views expressed here are his alone, and not the views of the Leadership Centre, the School of Management, or Ryerson University.